Sands Macao Opening 10 Years Ago Changed The World

The future of the global casino business and Macau began on May 18, 2004, the day they broke down the doors at Sands Macao. Ten years later, Sands Macao’s opening still reverberates through business and politics everywhere and has reset the economic development conversation throughout East Asia. Sands Macao, owned by
Las Vegas Sands and controlled by Sheldon Adelson, earned back its $265 million investment in nine months and transformed Macau from a chronically depressed dot on the casino map, struggling to shake off 450 years of malign neglect under Portuguese rule, to the world’s foremost gaming destination.

When the Beijing installed government put out its tender inviting companies to bid for gaming licenses in 2001, Macau was no sure bet. Triads that waged open warfare on Macau streets during the late 1990s to seize control of the gaming business didn’t bother to interfere with Sands Macao’s construction or opening: “They thought we were crazy,” a Sands executive recalled.

Sands Macao casino, Macau (Photo credit: Wikipedia)

The year before Sands Macao opened, revenue at Macau’s 11 casinos under Stanley Ho’s monopoly totaled $2 billion, less than half the revenue at Atlantic City’s 12 casinos. Last year, Macau’s casino revenue was $45.1 billion, and Atlantic City’s was $2.9 billion, It’s not just the amount of business Macau was doing back then that seems unbelievable now, but how it was doing business.

Before opening Sands Macao, LVS officials visited the then-main casinos, Lisboa, Jai Alai, and, on weekends, Landmark. Then as now, most of the action took place behind closed doors in VIP rooms. On the casinos’ main floors, the LVS team saw bettors lined up behind seats, sometimes eight deep, leaning over to place wagers.

“Lisboa and Jai Alai succeed in spite of themselves,” one of those LVS executives, who requested anonymity, concluded at the time. “If you were gambling $10,000 [Hong Kong; US$1,285] a hand at Lisboa and you wanted a cup of tea, you had to get up from the table yourself, go to a dirty drink counter, order it yourself, get it in a paper cup, and pay for it. We knew we could do better than that.”

On their visits, two things at Lisboa continually mystified LVS observers. Las Vegas casinos used brightly colored patterned carpets, but Lisboa’s carpets were solid black. Table tops at Lisboa were covered in light gray fuzz rather than Vegas style green felt. The Sands people wondered whether they too should have gray felt and black carpets. They quizzed local contacts about whether Chinese cultural chromatics, feng shui or some local superstition accounted for the color schemes. Focus groups were no help; in Macau they proved difficult to organize, and participants tended to say whatever they believed organizers wanted to hear.

LVS executive vice president Brad Stone put an end to the table debate when he declared, “We’re making a Las Vegas casino, and Las Vegas casinos have green felt.” The carpet debate ended with choosing an American style pattern as well. But many on the Sands team worried they’d committed grave cultural transgressions.

Around 3am on the night of the Sands Macao opening, the casino operations team made another trip to Casino Lisboa. For the first time, they found the betting floor wasn’t jam packed. Amid the thinned crowd, the executives could see corners and edges of the carpet hidden on previous visits. Those fringes revealed that the carpet wasn’t black after all; its colorful pattern had been obscured by layers of filth from hundreds of thousands of players’ feet. On tables not completely blanketed with chips this time, the Sands team spotted remnants of green felt along the perimeters. As the felt wore out, table markings had been traced and retraced with pens.

“The casino couldn’t stop play for 20 minutes to change the felt on a table; they couldn’t take time to clean the carpet,” the LVS executive said. “Nobody cared about giving people a clean place to play. It was the only game in town.”

From May 18, 2004, that wasn’t true anymore. The guys from Las Vegas had brought a new game to town, and everyone could see they were going to be big winners. To their credit, Stanley Ho and his team at
SJM Holdings that couldn’t believe the market would want a comfortable, Las Vegas style casino with touches of elegance, realized they’d been wrong and followed suit.